The invisible hand 0

 Walter Williams reminds us what Adam Smith said, what he meant by the ‘invisible hand’, why capitalism works and socialism doesn’t, and why our selfish instincts benefit others far more effectively than our charitable endeavors. Read his whole column here.

What is the driving force that explains how millions of people manage to cooperate to get 60,000 different items to your supermarket? Most of them don’t give a hoot about you and me, some of them might hate Americans, but they serve us well and they do so voluntarily. The bottom line motivation for the cooperation is people are in it for themselves; they want more profits, wages, interest and rent, or to use today’s silly talk – people are greedy.

Adam Smith, the father of economics, captured the essence of this wonderful human cooperation when he said, "He (the businessman) generally, indeed, neither intends to promote the public interest, nor knows how much he is promoting it. … He intends only his own security; and by directing that industry in such a manner as its produce may be of the greatest value, he intends only his own gain." Adam Smith continues, "He is in this, as in many other cases, led by an invisible hand to promote an end which was no part of his intention. … By pursuing his own interest he frequently promotes that of the society more effectually than when he really intends to promote it." And later he adds, "It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest."

Posted under Commentary by Jillian Becker on Wednesday, February 18, 2009

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